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Dow rallies more than 700 points after shocking record surge in U.S. jobs
Stocks rallied after a historic and surprising gain in U.S. jobs raised hope the economy is starting to recover from the coronavirus pandemic.
Good news.
However, I believe that once everybody goes back to work that will be going back to work, that the unemployment rate will bottom out at no lower than 10%. That will be a drag on the economy. Even if it bottoms out a bit below that - say 7-8% - that is still twice what we had before the pandemic.
Those 4% to 7% of unemployed will take much longer to erase, and some will never get their jobs back (e.g., me). We were headed to a recession before the pandemic. That hasn't gone away, it has been exacerbated and it will take months if not years for us to get past this.
Add on to that, Trump won't be re-elected.
The stock market doesn't look at long term results, it has a short attention span - more so in recent history than ever before. The next panic we have, there will be another significant selloff.
I am glad it is coming back. I am glad some people are going back to work. But 2.5 million is less than 10% of the people who were laid off. As this progresses, that rate of people going back to work will maybe speed up or remain the same for a little while, then slow down, then become a trickle.
When that is realized, and there is a rise in CV-19, and the stimulus fades, and small businesses go bankrupt - then there will be a selloff.
FWIW - heard from my SIL that he is the only remaining person doing his particular job duties where there were about 4 doing those duties before. He is working double the hours he was before - which is good for $, but he can't keep those hours up forever. Will his employer be able to get the people back when they decide they need them? Maybe, maybe not.
